Finance Blog

Markets took another dive today, Dow down 77 to 11,128.  It has fallen nearly 300 points in the last two sessions.

Dell Computers are going to start using AMD chips, although it’s just a small category of units (servers using dual-core Opterons)

Rumors about Dell’s adoption of AMD chips have been circulating for months, and some analysts have suggested that the company’s Intel-only policy was hurting business.  The deal also is a major win for AMD, which had little presence in the server market until it released its Opteron processor in 2003. The critically acclaimed chip put Intel in the rare position of having to play catch-up with its smaller rival.

In extended-session trading, shares of Dell rose 82 cents, or 3.4 percent, to $24.77 and AMD stock jumped $3.93, or nearly 13 percent, to $35.28 after Dell disclosed the deal as part of its first-quarter earnings report.

Dow up big today (+138.88, 1.21% to 11,577.74), as well as S&P/TSX (+144.24, 1.19% to 12,270.11).  Dow’s at its highest level in six years, just about 145 points shy of the measure’s record.  Some say Friday’s rally could represent something of a “last gasp” for the aging bull market.  Materials lifted the Canadian stocks, as gold is up 1.15% to $684.300.  Oil also returned above $70.

Big mover today is Activision (ATVI) shares jumped almost 13 percent in unusually active Nasdaq trade after the company posted a 3 cents per share fourth quarter loss vs. a penny EPS on a 7.7% revenue decline.  Interesting, while  just  yesterday Electronic Arts  posted a  16% increase in revenue, but dropped  11%  in stock price.  Thanks to the big  market players!

Bill Gates says he wished he were not the world’s richest man.

“I wish I wasn’t. There is nothing good that comes out of that,” said Gates, whose personal fortune sank by billions since last week when the software giant disappointed investors by saying new investments would crimp earnings.

That’s a quick fix, he could simply donate all his money to charity, and live like a normal person.

Microsoft is launching its own online ad brokering service called adCenter.

Microsoft makes bid to take a bigger piece of a U.S. online advertising market estimated to be worth around $15 billion. AdCenter will be initially limited to paid search, but Microsoft envisions the service being a one-stop shop for online advertising across many of the company’s software platforms including Xbox games and mobile phones.

Microsoft’s stepping right into Google terriority of advertising (where pratically all their revenue comes from). However, Microsoft still has a long way to go as it only has about 11% of searches, compared to Google’s 49% and Yahoo’s 22%.

Yesterday, Electronic Arts Posted 4Q Loss of $16M. Shares tumbled 10.92% today, closing at $48.55.

Revenue actually climbed 16%, but the loss was attributed to one-time charge for taxes and acquistion costs. So this price drop comes a bit unwarranted.

Taking a look at the games industry; sales of video games industrywide have slowed as customers have been withholding purchases and waiting to switch to next-generation models of game consoles.

Specifically, customers are holding out for Sony Corp.’s PlayStation 3 and Nintendo Co.’s Revolution consoles, both due later this fall.

The outlook for Electronic Arts still looks good to me, with no debt and strong game titles, they should do well once again with the transition of new consoles.

Microsoft has held discussions to buy a stake in Internet media company Yahoo to compete against Google, the Wall Street Journal reported on Wed.

The Microsoft vs Google battle is heating up, just recently Google complained about Microsoft browser and how IE7 will be integrating MSN search in their app.

Loonie closed at 90.38 cents vs. the US Dollar for the first time in over 28 years!  It has already soared 13.1% in the past year.  Here’s a 5-year chart of Loonie Rally…

Speculated Reasons:

1. Rising gold and energy prices
2. Poor sentiment against the U.S. dollar
3. Global investment demand

When I started investing in US equities back in Nov. 2003, the exchange rate was 1.5452, or a 64.72 cent loonie.  That’s about a 40% appreciation compared to the U.S. Dollar!

What this means…

• Pain for manufacturers, who export goods to the US.  Cdn goods now are very expensive to the US importers, meaning less business
• Good for retailers, who import goods that now cheaper.
• Good for travellers, vacationing outside the country
• Good for purchasers of US equipment, and machinery, thereby increasing productivity.

Analysts expect the loonie to trade at average 90 cents this year.  Next year average around 97 cents.